Trading Markets, CA
Ferret’s Stock To Watch: TAMAYA RESOURCES LIMITED
Sunday, September 16, 2007; Posted: 06:16 PM
Sydney, Sep 17, 2007 (RWE via COMTEX) —
COMPANY BUILDS UP AN IMPRESSIVE MINING PORTFOLIO (RWE Aust Business
News) OVERVIEW
There should be plenty of action in Tamaya Resources which has some
very prospective paydirt in Chile, Portugal and Armenia and other
parts of the globe.
The company recently merged with Iberian Resources, a successful
Chilean gold and copper producer.
It now has a full exploration portfolio, and of course the intriguing
value proposition of the gold Lichkvaz-Tey project in Armenia, and
Portuguese exploration prospects.
The company recorded a turnaround profit of $A1.4m for 2006, after a
lengthy period of unprofitable trading.
Last week the Tamaya executive chairman Hugh Callaghan disclosed the
company will join the TSE as a junior copper-gold producer next year.
It augurs well for Tamaya shares which appear undervalued on new
resources updates released last Thursday.
However, Tamaya shares still have a go before they start being quoted
on the Toronto Stock Exchange, the home of the world’s most active
speculators.
At the same time Tamaya Resources reported a net profit of $6.5
million, up 145 per cent, for the half year to June 30 2007 compared
with $2.7m in the prior corresponding half.
Sales revenue was up 68 per cent to $22.8m.
Copper production was up 67 per cent to 2,717 tonnes while the copper
price achieved $8,402 tonne.
Mr Callaghan said the performance was significant as it marked the
beginning of the transition from a single operation to a junior with a
diverse portfolio and potential to develop into a mid tier mining
company.
"The strong financial performance and our acquisition of Iberian
Resources and the Latitude copper portfolio in Chile are set to
transform Tamaya into an internationally competitive copper/gold
mining group," Mr Callaghan said.
Earnings before interest and tax (EBIT) were $9.8m, reflecting a much
improved performance compared to previous half-year periods.
Copper production during the half-year totaled 2,717 tonnes (2006:
1,626 tonnes), which accounted for about $9.0m of the increased sales
revenue.
"We got cash costs down some 8pc to US$1.48/lb payable copper, but
more importantly this was achieved with an increase in milled
throughput of 62pc and a corresponding increase in copper metal
production of 67pc," Mr Callaghan said.
"Significantly, we think we can reduce these further as we increase
milled throughput at our Punitaqui plant following the daily
throughput increases we are forecasting from January 2008 to 3,000 ore
tonnes per day and then stabilize the mine and plant with key
operating disciplines, including higher recoveries.
"We also expect to see further reductions in copper smelting and
refining costs due to the tightness of copper concentrate supply in
international markets."
Tamaya reported that its Punitaqui mining complex is currently
undergoing an expansion to increase the mill throughput to 3,000
tonnes per day (Project 3000).
The expansion is expected to be completed by the end of December 2007.
"At this time, we expect to produce in excess of 12,000 tonnes of
copper per annum from 2008," the chairman said.
SHARE PRICE MOVEMENTS
Tamaya Resources rose 2.5c to 30c on Friday. Rolling high for the year
was 35.5c and low 11c. The company has more than a million shares on
issue (1.041m) with a market cap of $312.3m.
The new group resource estimate covers:
Significant increase in copper resources
Substantial new gold resource for Tamaya
An increase of 45 per cent in reserve tonnage and an increase of 47
per cent in copper metal in reserve
The introduction of an open pit mining section at Cinabrio (Chile)
At September 2007 the consolidated resource position currently stands
at:
Gold: 1,742,902 ounces in all resource categories
Copper: 302,770 tons in all resource categories
Silver: 4,465,738 ounces in all resource categories BACKGROUND
Tamaya Resources Limited was listed on the Australian Stock Exchange
on January 3 2001.
Key operations and projects include:
Punitaqui, Chile – operating mine undergoing expansion
Lichkvaz (gold), Armenia – ready for development, subject to financing
Andean copper belt exploration leases, Chile – 40 kilometre long
holding
Montemor and Portalegre, Portugal – advanced gold exploration leases.
Since its last annual resource statement update as a single mine
operation, Tamaya has acquired a majority 86.2pc interest in Iberian
Resources Ltd and acquired Latin American Copper Chile S.A., the
former Chilean subsidiary of Latitude Resources plc.
Iberian has a near production gold mine in Armenia and advanced
exploration gold interests in Portugal.
The Latitude deal included a portfolio of tenements with a focus on
the iron oxide copper gold belt in the coastal ranges of Chile, and
the stand-out prospects of Filipina Grande and Santa Dominga.
As a result of the acquisitions Tamaya has moved from being a single
copper mine operation to a global portfolio that comprises a copper
mine in production (Chile), a gold mine near production (Armenia), a
number of advanced gold exploration projects and a portfolio of copper
and gold exploration tenements in four countries (Chile, Armenia,
Portugal and Australia).
Referring to the Iberian Resources purchase, Mr Callaghan said it had
been a success and the company was very comfortable with the current
position as a majority shareholder. On August 13, 2007, the company
formally entered into a sale and purchase agreement with Latitude
Resources plc to acquire Latin American Copper Chile.
The consideration for the acquisition was $US24.7m, to be satisfied by
the issue of 85m shares in Tamaya Resources and 15m 3-year options to
be issued in three tranches of 5m options, each tranche with an
exercise price of 30c per share, 40c per share and 50c per share
respectively.
The acquisition was completed on September 5.
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